Economy shrinks in August as manufacturing sector slumps - as it happened

Follow live updates as markets await latest official GDP data

Related Video: EU says ball is still in the UK's court on getting Brexit deal done (PA)

Britain’s GDP fell 0.1 per cent in August from the previous month – the first drop since April – after an upwardly revised 0.4 per cent rise in July, official data showed. The figures put the economy on track for a modest expansion in the third quarter, after a surprise contraction in the second quarter.

Meanwhile, homeowners are increasingly shunning the property market because of heightened uncertainty about Britain's future, research has found.

The number of new homes coming to the market slumped to a three-year low in September while buyer demand also fell, a poll by the Royal Institute of Chartered Surveyors found.

The live blog has ended.

Key Points

• New £20 note featuring painter Turner revealed as Bank of England’s most secure
• Boris Bus maker faces 'decision day'
• Housing market hit by 'endless wrangling around Brexit'
• US and China seek to end trade war in fresh talks
• Death of the high street? Not so, says HMV

[10 October 2019 10:11 · ben.chapman]

Recession fears 'banished' for the time being

Andrew Wishart, UK Economist at Capital Economics thinks the UK will avoid a recession.

"While GDP fell by 0.1% m/m in August as we had expected (consensus 0.0%), the fact that growth in July was revised up from 0.3% m/m to 0.4% m/m means fears that the economy is already in recession have been banished.

"In fact, the August GDP data suggest the economy might grow by 0.4% q/q in Q3, up from our previous estimate of 0.3% q/q.

"The fall in GDP in August was due to a 0.7% m/m drop in manufacturing output.

"There were hopes that car plants would stay open in August when they usually shut for maintenance, having already shut down in April in case there were a no deal Brexit, and provide a boost to the sector. But in the event car production rose by just 0.7% m/m in August."

[10 October 2019 10:24 · ben.chapman]

Southern Water fined £126m over 'serious environmental failings and deliberate misreporting

Southern Water will pay £126m in penalties and rebates to existing and former wastewater customers, the biggest payment ever imposed by Ofwat.

The regulator's investigation found Southern Water failed to invest enough into its sewage works or to properly invest in them.

"Southern Water’s failures led to equipment breakdowns and unpermitted spills of wastewater into the environment," Ofwat said. 

The Environment Agency is currently investigating whether any environmental impact may have been caused by the company’s failures.

The £126 million package will see Southern Water:

• Return £123 million to former and existing customers. 
• Pay a fine of £3 million on top - in recognition of the serious and significant breaches of its licence conditions and statutory duties

[10 October 2019 10:25 · ben.chapman]

After an $8bn verdict against Johnson & Johnson, here’s why America’s runaway juries might be a good thing

"It’s the sort of verdict the size of which even John Grisham might think twice about including in one of his legal thrillers," writes The Independent's chief business commentator, James Moore.

"Johnson & Johnson was hit with an $8bn (£6.5bn) penalty by a real-life “runaway jury” over its marketing of an antipsychotic drug, Risperdal, which has the unfortunate potential side of effect of causing male users to develop breasts."

[10 October 2019 10:34 · ben.chapman]

Subdued growth in construction sector

The UK construction sector eked out 0.1 per cent growth the three months to August.

CliveDocwra, managing director of construction consultants McBains, was less than impressed:

These latest figures show minimal growth overall but no-one in the industry will be getting too excited. 

The trends show that the industry is experiencing a mixed profile of monthly growth, with falls in March, April and June largely offset by increases in May, July and August.  There was also a month-on-month decrease in new work of 0.2% in August.

This fall in new work reflects the industry being at a crossroads as the Brexit situation remains unclear, with the longer-term picture one of investor restraint and a weakness in the housing market translating into a fall in the numbers of homes.

[10 October 2019 11:04 · ben.chapman]

Dunelm hails rising sales 

(Press Association) Dunelm has hailed a "particularly strong" first quarter after it boosted sales on the back of new store openings and online growth.

However, shares in the company sank in early trading after it warned that trading in September was "mixed" due to a "softer homeware market".

The retailer posted a 7.5 per cent rise in total sales to £262.6 million for the three months to 28 September, while like-for-like sales increased by 6.4% to £255.6 million over the period.

[10 October 2019 11:23 · ben.chapman]

New £20 note featuring painter Turner unveiled

The Bank of England has unveiled the design of the new £20 note, featuring JMW Turner.

And they have released it with a piece of artwork of which England's most famous painter would no doubt have been proud:

[10 October 2019 11:40 · ben.chapman]

Brexit and global economy hurt Hargreaves Lansdown

Hargreaves Lansdown says it was hit by "weak investor sentiment" in the past three months due to fears about Brexit and the future of the global economy.

Sentiment will no doubt also have been damaged by the fiasco that saw almost 300,000 of Hargreaves’ customers and £1.6bn of their assets trapped in Neil Woodford’s struggling investment fund.

Despite the debacle, Hargreaves hailed a "solid start" to the financial year.

The fund supermarket reported a 6 per cent rise in net revenue to £128.1m for the three months to 30 September. New business also increased, up to £1.7bn from £1.3bn.

[10 October 2019 12:10 · ben.chapman]

'Deeply regrettable': Wrightbus rescue talks fail as JCB heir pulls out

Last-ditch talks to save Northern Ireland's Wrightbus have ended without a deal, prompting an impassioned statement from the firm's former owner Jeff Wright.

He hit out at Jo Bamford, son of JCB chairman Lord Bamford, who was in the frame to buy Wrightbus but has now walked away.

Also under fire is North Antrim MP, Ian Paisley.

[10 October 2019 12:14 · ben.chapman]

Death of the high street? Not so, says HMV

HMV says it has taken a step towards a revival with a new 25,000 sq ft store in Birmingham.

The purveyor of CDs, DVDs and LPs, claims the new store will be the biggest music and entertainment retail space in Europe.

HMV is taking the fight to Amazon with an experience the online giant can't offer (not at the moment anyway):

Alongside music, film, books and fashion merchandise, the store will offer a specially-designed performance space, inviting both local artists and international musicians to perform in-store.

The store’s Friday launch will see a performance by Liam Payne, with chart topper James Arthur set to perform on Saturday.

[10 October 2019 12:38 · ben.chapman]

Unite union is saying that talks on Wright bus are still alive but "hanging by a thread", the BBC reports.